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Sustainable development through structural transformation: a pathway to economic, social, and environmental progress

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Abstract

Over the last several decades, environmental sustainability along with social as well as economic growth has been given key importance due to the pressure it imposes on an economy. Therefore, to achieve these three goals together, the world now advances toward attaining sustainable development agenda signed in 2015. The objective of this study is to scrutinize the impact of structural transformation (STR) on socioeconomic and environmental progress captured by sustainable development (SDI) for a global sample of 122 countries. We consider the period from 2000 to 2019 and employ two-step system GMM methodology to take endogeneity into account which might exist between STR and SDI. In line with the literature of economic growth and STR, we include other variables such as corruption, population growth, government consumption and investment. The results from the two-step system GMM suggest that STR positively affects socioeconomic and environmental progress. We also consider the countries according to World Bank income classifications and K means clustering based on the value of STR. For low, upper middle-income and high-income sample, we find that STR positively affects socioeconomic and environmental progress, while it has no significant impact on such progress for lower middle-income category. Having stable structural transformation benefits the economy, society and environment, while unstable structural transformation is not beneficial. Based on the results, policy directions are suggested for the full sample as well as for the subsamples in order to achieve sustainability in all the sectors.

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Data availability

Available upon request from the corresponding author.

Abbreviations

ARDL:

Autoregressive distributed lag

BCI:

Bayesian corruption index

DEVI:

Development index

DSK:

Driscoll–Kraay estimator

ECF:

Ecological footprint

ECX:

Economic complexity

EII:

Ecological impact index

FAO:

Food and Agriculture Organization

GDP:

Gross domestic product

GMM:

Generalized method of moment

GOVC:

Government consumption

GR:

Growth

HDI:

Human development index

INV:

Investment

MDG:

Millennium development goals

MG:

Mean group

MLE:

Maximum likelihood estimation

NARDL:

Nonlinear autoregressive distributed lag

NICs:

Newly industrialized countries

OECD:

Organization for economic cooperation and development

OLS:

Ordinary least square

PM2.5:

Particulate matter 2.5

PMG:

Pooled mean group

POLS:

Pooled OLS

POPG:

Population growth

SDG:

Sustainable development goal

SDI:

Sustainable development

STR:

Structural transformation

TFP:

Total factor productivity

UN:

United Nations

WDI:

World development indicators

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Acknowledgements

The research funding from the Ministry of Science and Higher Education of the Russian Federation (Ural Federal University Program of Development within the Priority-2030 Program) is gratefully acknowledged.

Funding

The research funding from the Ministry of Science and Higher Education of the Russian Federation (Ural Federal University Program of Development within the Priority-2030 Program) is gratefully acknowledged.

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Authors and Affiliations

  1. School of Business, Zhengzhou University of Aeronautics, Zhengzhou, 450046, China

    Lingfu Kong

  2. Department of Economics, Kırşehir Ahi Evran University, Kırşehir, Türkiye

    Emrah Sofuoğlu

  3. Faculty of Business and Management, Department of Marketing and Advertising, Universiti Sultan Zainal Abidin, 21300, Kampung Gong Badak, Terengganu, Malaysia

    Balogun Daud Ishola

  4. Graduate School of Economics and Management, Ural Federal University, Ekaterinburg, Russian Federation

    Shujaat Abbas

  5. School of Economics and Management, Xinjiang University, Urumqi, 830046, China

    Qingran Guo

  6. Department of Finance, Doctor of Science in Economics, Tashkent State University of Economics, Tashkent, Uzbekistan

    Khurshid Khudoykulov

  7. Adnan Kassar School of Business, Lebanese American University, Beirut, Lebanon

    Shujaat Abbas

  8. MEU Research Unit, Middle East University, Amman, Jordan

    Shujaat Abbas

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  1. Lingfu Kong
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Appendix

Appendix

See Table 29.

Table 29 List of countries included in the sample
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Kong, L., Sofuoğlu, E., Ishola, B.D. et al. Sustainable development through structural transformation: a pathway to economic, social, and environmental progress. Econ Change Restruct 57, 27 (2024). https://doi.org/10.1007/s10644-024-09583-3

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